Do Home Buyers Pay Agent Fees?

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Whether you are buying or selling a home, working with a professional real estate agent is always going to make your experience smoother and more successful, especially when you work with a top-tier agent during a home search! There’s no doubt you’ll be surprised by the homes your agent finds and the neighborhoods they suggest. But aside from the excellent service you’ll receive, you may be wondering who is responsible for paying the buyer’s agent fee when you work with an agent to purchase a home. Undoubtedly, it can be a little difficult to differentiate who pays for the fees associated with the sales of a home so we thought we’d help by breaking down how buyer’s agent fees are collected!    
Simply put, traditionally the seller pays all of the commission fees associated with the sale of a home. The commission fee for your buyer’s agent is factored into the final total commission percentage and split between the two agents (buyer and seller) involved. Investopedia provided an excellent example writing, “Standard practice is that the seller pays the fee. However, the seller usually wraps the fee into the price of the home. So, the buyer ultimately ends up paying the fee, albeit indirectly. Let’s say, for example, that a buyer and seller (each with a real estate agent) agree to a deal on a home for $200,000. Assuming the real estate commission is 5%, the fee would be $10,000 ($200,000 x 0.05). The fee comes out of the cost of the home—it is not added to the sale price. So, although the buyer would pay $200,000, the seller would receive $190,000 from the sale.” 

In contrast, every now and then commission fees are paid by the buyer, however, this is certainly not the norm. In those scenarios, it is agreed upon by the buyer and their agent upfront before they move forward with seeking out and purchasing a home. This may occur when the buyer is looking to purchase a property or home that isn’t listed on the Multiple Listing Service and isn’t already being listed by an agent. Gary Singer, a board-certified real estate lawyer, wrote the following for the SunSentinel, “While it is customary for the seller to pay the agent’s commission, sometimes the buyer will pay it instead. It all depends on what is voluntarily agreed to by the people involved. In the typical home sale for a property on the multiple listing service, the seller has hired an agent and agreed to pay a commission. That listing agent then offers half of the commission to any other agent who brings a buyer. Sometimes a buyer will agree to hire and pay a real estate agent, usually to find a property that is not listed on the MLS. Because the seller does not have an agent that he or she agreed to pay, there will be no listing commission to split, and the buyer has to pay the agent directly.”  
Still have a few questions about the buying process and how an expert agent can help? When you connect with a member of our client concierge team you can iron out any questions you may have and get connected with the right agent to help you find your ideal home! 

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